After all this, Where will DT Toronto Precon Condo Prices end up??

RichmondCA wrote: ↑ Lots of factors to consider, but pre con stopped making sense when resale cost the same per square foot yet you were still taking on all the construction risk (things have become much worse with pre con being more than resale - this makes zero sense regardless of what narrative starry eyed realtors are feeding you). With that in mind and based on history when it was lucrative to buy pre con because it was double digit discounted to existing resale if I was to speculate that is where we are going if the margins are there for the developer (something tells me margins won't be there, but renegotiating of construction contracts and land cost margins may magically fall in line over time).

Pre con at 0%-10% discount per square foot from comparable existing resale is what "feels" might be the direction we are heading in. Reason being is that pre con always "worked" as long as we had massive appreciation YoY into infinity (last 2 decades). Assuming prices stay flat or at worst decline the only directional factor that propped up pre con being gone then I think projects at discount to resale will make sense as the pricing metric. This statement carries variability because if resale condos go down so would appetite for pre con (this is why I am pegging a % to a moving target than trying to aim at $1,xxx/sq. ft.)

The big issue however is construction cost which has gone up dramatically over the past decade that I don't know what gives first between developer margin/construction/permitting/land cost. Those are your 4 major buckets, the reduction per unit has to come out of three (margin/construction/land cost).

JayLove06 wrote: ↑ Builders simply will not build. They will wait it out.

Buyers will be able to bargain a bit.

RichmondCA wrote: ↑ Some will, many can't. A lot of these projects are backed by investor capital with different objectives. If there is long term uncertainty they may force a liquidation even at a loss to deploy that capital elsewhere. Which brings me to the point I made earlier, this may be one way that land cost may drop making cheaper condos viable. This is a very long drawn out process, but nonetheless it's on the mind of investors who are sitting with money tied up in cancelled/on hold pre con projects.

lpin14 wrote: ↑ Pre-con will likely not command the prices seen so far. I think a a second wave of job losses is gonna hit. A lot of companies have held off making cuts because of potential bad publicity in these times. Once things get back to normal, companies will cut citing reduced demand for their services/products.

JayLove06 wrote: ↑ I disagree for the most part especially condos. Builders sit on land for years. If the numbers do not work, thry will not build. Why build if you will lose money? Thry will hold and wait. Thry may sell land thry already own. Not saying thry will completely stop building anything, but thry will not be as active. The numbers have to make sense. Now the ones that are already in progress well you will see cancellations, delays, and in some cases discounts on remaining stock. Likely just incentives. That’s just my take.

Also, unless all the costs drop by a large margin along with the government’s cut, I don’t see how the numbers work. Land downtown isn’t dropping much IMO. builders hold land for a long tome. 10 years from now values will be higher. I’d agree with you if we basically went into an economic tsunami and everything across the board dropped 50%, immigration banned, CERB on year 5 and we have 50% employment.....and we are waiting in line for food. Yea. I just don’t see that happening. I could be completely wrong though but a lot needs to happen.

Builders have their margins built in, government has their cut built in. I don’t see land selling 1/2 price downtown Toronto.

FedExpress wrote: ↑ What do you feel the new normal $/sq foot price range will be for Downtown condos once the cuts you envision start happening?

FedExpress wrote: ↑ Are investors who bought into projects like The Well or United getting worried? Too early to say perhaps...

FedExpress wrote: ↑ Are investors who bought into projects like The Well or United getting worried? Too early to say perhaps...

lpin14 wrote: ↑ $900-1000 psf for new projects.

I heard a couple of years ago that a couple of condo towers were going to get built in the Bayview Village parking lot area. Not sure if that was true or not, but if it was, I wonder what's going to happen now.

oasis100 wrote: ↑ Builders will just sit on the land. These people have long time-frames.

Do you know how long the builder was sitting on the site for Union Village in Markham? yeaaaaarrrrrrrrs.

Kylemore homes owns more land at Kennedy and Major Mack that is adjacent to the land owned by Minto/Metropia. They havn't developed the land either.

Builders just leave the site as a parking lot if they have to. Don't worry about these people. They will come out ahead and people will pay.

oasis100 wrote: ↑ Builders will just sit on the land. These people have long time-frames.

Do you know how long the builder was sitting on the site for Union Village in Markham? yeaaaaarrrrrrrrs.

Kylemore homes owns more land at Kennedy and Major Mack that is adjacent to the land owned by Minto/Metropia. They havn't developed the land either.

Builders just leave the site as a parking lot if they have to. Don't worry about these people. They will come out ahead and people will pay.

oasis100 wrote: ↑ Downtown core? zero chance under 1k sqft.